You said you wanted to shift away from prioritizing basically an export-focused system to one based on more local goals and you said you wanted to see more young farmers enter agriculture. I still don't see how you square that circle and make it affordable for young farmers to enter the market if we're going to exclude exports out of the equation. To me, it doesn't add up financially.

In no way do we want to exclude exports from the equation, but right now net farm income is below zero, so certainly our current system is not working. Based on exports, farmers are going out of business. That's not the way to bring more farmers in. There's a more positive way to bring farmers in, which is around building local economies. Then they'll be supported and be able to stay in business. That would be the short answer.

Every commodity group in the last half of 2010 and all of 2011 had banner record years, every one of them, so I dispute that figure as well. Maybe you could supply that to us, because I personally don't buy it.

Canada is a very high-cost agricultural production country in terms of heating, transportation, and labour. If you were to suggest a type of food industry in which we would be internationally competitive and have the competitive advantage, what area would you consider we go into? It is a key part of our entire national economic strategy to be an exporter of agricultural products. That includes the fisheries and even caribou—I would go that far—and seals.

Well, fundamentally, you look back to our climate and our agricultural land base in terms of what we are best suited to. We're not the greatest vegetable climate in the world. We have half of southern Alberta covered in greenhouses, and we still can't supply everything required.

I would say livestock, cattle, and pigs, and to a lesser extent poultry and oilseeds. We have huge tracts of land where we can grow great oilseeds. We could do other similar types of things. I think the Spitz example is a good one. They put together basically vertical integration, contracted with the farmers to grow sunflower seeds, and unfortunately were sold to Frito-Lay, so it's now an American company. It's not a Canadian one anymore.

You could take those particular areas and ask what the valued-added things are. Well, we shouldn't be shipping canola seed. We should be shipping oil. There are other things we can do with those types of products.

Certainly there are all sorts of things on the grain side. We are a major baking nation in terms of the types of things we do, be it gluten or gluten-free. There are both sides of that equation. We can add high value to it.

We have good dairy resources in this country. We have some issues domestically in terms of what supply management has done, not necessarily with regard to pricing but with other factors that have occurred in that particular area.

I would pick the ones with the best agricultural base and then ask what value-added items we can add to make us competitive.

In terms of food processing, we will also be falling behind Latin America and Asia in terms of the pure labour input. That still means we will be a net producer of the basic food itself and will have it processed in Asia or Latin America. Even if we import it back into Canada, it will still be cheaper than producing it ourselves, so what is the strategy to maintain that work in Canada?

That, primarily, is where the area of automation modernization is required.

The Netherlands are very competitive at much higher wage rates and benefit rates than what we have in this country, and they have high energy costs and all the rest of it.

Just as an example, energy is a major component. Alberta has the highest industrial energy rates in North America. Our guys are being killed. When this Bill 50 goes through with the power grid, it will be double or maybe or even triple what we have today. They're not stupid; it's deregulated, so guess what? Monday to Friday, 9:00 to 5:00, is when the rates are highest, and that's when your plants are operating. That's because you have a labour shortage, so the people you can get only want to work Monday to Friday from 9:00 to 5:00. You're not running 24-7. However, at an automated facility, for two-thirds of the time you be would running when the energy costs were lower.

Those are the kinds of things we have to do to get costs out of the processing sector. That's why we keep coming back again and again to modernizing it and automating it and getting ourselves competitive, because those other input costs are not going to change.

An economist once mentioned that food production grows arithmetically and population increases geometrically. If that is true— and I believe that it's true, and we've seen it over the last 200, 300, or 400 years—your model of sustainable small farms will not work. Small farming is simply not sustainable. Local food producers can only produce for a very limited population, as long as that population is static. Once that population grows, as in some urban centres, I don't think your model is sustainable. Would you address how you can make it sustainable? How do you see that it can be sustainable?

I think there's a real misunderstanding around that idea, actually, because the figures globally are that 70% of people are fed by small-scale peasant agriculture. I think that if we canvassed most people, they would think that they are fed by large—

I'm talking about our society. In looking at England and Europe and North America, Thomas Malthus was addressing this issue when he proposed his theory of food production versus human population growth.

Just look at the amount of food that we import versus the amount of food that we produce locally. Take a city like Toronto. It is totally out of whack. We cannot sustain ourselves with the farms near southern Ontario. We cannot sustain a population of 5.5 million in the Greater Toronto Area.

We've seen, over time, a shift from being able to feed more Canadians with Canadian food to not being able to feed as many Canadians with Canadian food. We believe it's possible to reverse that trend and feed more Canadians with Canadian food.

Ms. Paskal, you made a comment early on—I don't know whether it was in your presentation or in one of your answers—about there being fewer farmers out there today. I always use the example of my grandfather, who raised 10 kids in the late 1920s, the 1930s, and the early 1940s on 100 acres of land. He worked a bit off and sold a bit of wood and that kind of thing. My father raised my six brothers and sisters and me on about 1,800 acres. When I farmed, I was up to 2,800 acres.

The reason I bring this up is that for about 70 years the number of farmers has been decreasing. This isn't a new phenomenon. Is there less land being farmed out there? I think I know the answer, but that's the way it is; whether we like it or not, farms are simply bigger today. There is no less land being farmed, although obviously there is a bit of development around big cities; Mr. Leung was just talking about Toronto, and it always burns my butt that some of the best farmland in the world gets paved over instead of being farmed.

Would you agree that there are fewer farmers, but not any less land being farmed in Canada?

I think it's just what you say: the farms are getting bigger and bigger, so there are fewer farms, and those farms are bringing less return per farmer. It's not as easy to have 22 people supported on one farm as it used to be.

That goes back to the net farm income question that we were bringing up before. The net farm income usually includes subsidies and off-farm income. That's how we see farmers having a positive balance sheet. However, if we take out the off-farm labour—like the wife of the farmer working as a schoolteacher in the nearby town—then that's a net zero. It's incredibly difficult to attract farmers to that kind of financial reality. The ones who are already farming get trapped in a cycle of debt. The farm debt is astronomical. That's not a desirable livelihood.

Okay, but I'll come back to your point. You made a comment about 22 employees. I presume what you meant was that a bunch of individual farms that used to support 22 people are now down to one or two people because of technology. Is that what you were saying?